Revised July 15, 2004


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On April 22, the Department of Housing and Urban Development issued a notice making far-reaching changes in its policy for funding “Section 8” housing vouchers during 2004.  A new Center report, Further Action by HUD Needed to Halt Cuts in Housing Assistance for Low-Income Families, explains that HUD’s policy is forcing state and local housing agencies across the country to make cuts in voucher assistance that will cause significant hardship among low-income families.

On May 20, HUD Secretary Jackson announced steps to mitigate the harmful effects of the new policy.  These steps (adjusting HUD’s new method of calculating agencies’ funding levels and providing some unused 2003 funds to about a fifth of agencies) reduced the magnitude of the required reductions but have not eliminated the need for harsh cuts by many agencies.

Some agencies are raising the rental charges that voucher holders must pay by reducing the amount of rent that a voucher can cover and thus shifting costs from the voucher program to low-income tenants.  Other agencies are reducing the number of families they assist.  Some agencies’ funding shortfalls are so severe that they have been forced to terminate assistance to some low-income families that currently rely on vouchers to help pay the rent.

Under the new system, HUD will limit each agency’s average funding per voucher to the agency’s average per-voucher cost for May-July 2003, plus an adjustment for rent inflation that has occurred since then in that part of the country (as determined by a HUD-devised formula).  In many local areas, however, voucher costs have risen more than HUD’s rent inflation factor for that part of the country, usually for reasons largely beyond local agencies’ control.  Agencies in these areas will not receive sufficient funds to pay landlords for the vouchers now in use.  Nationally, the shortfall will exceed $183 million, according to the National Association of Housing and Redevelopment Officials.

Examples of Local Cutbacks 

  • The Secaucus (NJ) Housing Authority has reduced the maximum rent it will cover by $163 per month. 

  •  The Portland (OR) Housing Authority has stopped issuing new vouchers when voucher holders leave the program.

  • The Memphis (TN) Housing Authority has told 160 families that they may not use their recently issued vouchers.

  • The Alameda (CA) Housing Authority has cut off Section 8 voucher assistance to 108 families.  The city is using other funds to help these families, but that aid will likely run out at the end of August.

  • The Montana Department of Commerce is imposing a minimum monthly rent of $50 on the poorest 488 families in the program

HUD admits that its new policy (prior to the appeals process) will leave unspent about $190 million from the funds Congress appropriated for the program in fiscal year 2004, even as housing agencies across the country institute cuts that harm needy families.  CBPP estimates indicate that the unspent amount could be substantially higher.


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